The London High Court has approved the restructuring plan to save fashion chain River Island from bankruptcy. 33 stores will close, while rents of 71 others will be reduced.
Tens of millions in debt
Earlier this summer, it was revealed that River Island was on the brink of bankruptcy. The retailer is suffering from rising costs and the shift to online shopping. Court documents show that the company has an estimated deficit of more than 43 million pounds (nearly 50 million euros) and is seeking 54 million pounds (62 million euros) in new funding to stabilise its balance sheet.
A sweeping rescue plan had to get the agreement of three-quarters of the creditors, but as that quorum was not reached in all subdivisions, court approval was needed.
That approval has now been granted, allowing the ailing retailer to close 33 stores (all in the United Kingdom) and cut the rents of another 71. 1,000 jobs would at risk. Irish stores are not affected. River Island still has 223 stores and 5,500 employees in the United Kingdom and Ireland.
